Yesterday, the Aussie fell below 62 US cents, and it stumbled further this morning, reaching as low as 61.84 at one point.

That’s its lowest level in the best part of half a decade. The last time the dollar was so weak was in early 2020, during the onset of the pandemic.

However, the Aussie rallied, and after midday had rebounded to just above 62 US cents.

The earlier slump came after a significant sell-off in the Chinese yuan.

That, in turn, came after Chinese President Xi Jinping admitted his country – Australia’s largest trading partner – is facing economic uncertainties in a New Year’s address.

“The Chinese economy now faces some new conditions, including challenges of uncertainties in the external environment and pressure of transformation from old growth drivers into new ones,” he said.

“But we can prevail with our hard work.”

The dollar’s struggles over the last few days continue a trend seen throughout 2024.

The Aussie fell about 8 per cent against the greenback over the last 12 months, a little over 7 per cent against the British pound, and 3 per cent against the Euro.

The US dollar has been particularly strong over the last four months, fuelled in part by Donald Trump’s election win.

The president-elect will take office for a second time in less than three weeks, and a number of his election promises – and how exactly they are implemented – are set to have a significant impact on the global economy, including exchange rates.

In particular, his promise to slap heavy tariffs on imports, including those from China, Mexico and Canada, is set to have far-reaching effects across global markets.